Canada’s broadcast regulator is doing away with a controversial fee charged by many cable and satellite companies to help improve local TV programming – and forcing them to stop passing the cost on to their customers.
The Local Programming Improvement Fund will be phased out by Aug. 31, 2014, the Canadian Radio-television and Telecommunications Commission announced Wednesday.
The regulator will also require cable and satellite companies to show by this fall how they intend to remove the fees from customers’ bills, and to prove that customers have been made aware that the costs have been eliminated.
“The fund was created to ensure television stations had the resources to meet Canadians’ needs for local programming,” Leonard Katz, the CRTC’s vice-chairman of telecommunications, said in a statement.
“We are satisfied with the support it has provided during a difficult economic period.”
The $100-million fund was established in 2008 to support small-and mid-sized local stations as they dealt with the recession just as they were spending millions to make the transition to digital television.
A total of 78 stations received $100 million from the fund in 2010, and 80 stations received $106 million last year.
But the CRTC says with a recovery in full swing in the advertising sector and the transition to digital now complete, the fund is no longer needed.
The plan was paid for by the cable and satellite companies, which promptly passed on the cost of the fees directly to consumers, who complained in the tens of thousands.
Cable and satellite companies will be required to prepare reports by mid-September of this year, outlining how they will stop charging the fees. They’ll also have to prove that customers have been told either that the fees are being eliminated or that they were never required to pay them.
The CRTC said it’s confident that small and mid-sized local stations will be able to maintain quality programming without the fund.
At the same time, the regulator hinted Wednesday that is may be open to some other support mechanism for a number of CBC-Radio-Canada television stations in official-language minority communities.
The commission said it will hear from the public broadcaster at its licence renewal hearing in mid-November.
Has the CRTC made the right call? Is the ad sector’s recovering “in full swing” as the regulator suggests? Post your thoughts in our comment section.
